U.S. Secretary of State Condoleezza Rice's visit to Jakarta today is intended to showcase Indonesia's transition to democracy. It follows the Bush Administration's controversial decision to reestablish full relations with the Indonesian Military (TNI). That move opens the door to renewed U.S. assistance, but pumping aid to an unreformed Indonesian military would serve only to encourage further rights abuses and undermine civilian governance.

The Indonesian military has long been responsible for grave abuses -- including extrajudicial executions, torture, and arbitrary detention -- in conflict areas such as Aceh and Papua, as well as a range of serious abuses across the country. But, as recognized by the U.S. State Department in its annual human rights report issued last week (March 8), military personnel of all ranks have largely been above the law.

For years, the TNI has been accountable only to itself. It raises and spends large sums of money completely outside government control. It is involved in a vast network of military-owned business enterprises, shady deals with private entrepreneurs, criminal activities such as illegal logging, and corrupt practices like inflating the price of weapons purchases. Foreign corporations operating in Indonesia can easily become linked to lawful and unlawful military business activities.

For instance, U.S. mining giant Freeport McMoRan makes huge security payments to Indonesia's military, totaling around US$60 million through 2004. Freeport reportedly doled out at least a third of that directly to individual commanders and units. The company, which denies any wrongdoing, faced recent protests in Indonesia over its close ties to the TNI and other practices.

Corporate protection payments that bankroll Indonesia's highly abusive security forces undermine civilian control and threaten democratic governance. These payments also facilitate abuses of power and military impunity, because civil authorities cannot exercise effective oversight if they do not control the flow of funds.

Today it is estimated that Indonesia's official defense budget covers only between one-third and a half of what its military actually spends. Contributions from private companies, together with revenue from military-run businesses and illegal economic activities (including corruption), help make up the rest.

The September 2004 TNI law banned the military's business activities and ordered the government to withdraw the military from business by 2009. But the Indonesian government has been very slow to transform the potential of this law into reality.

It has suggested that its plan to take over military businesses, when it is finally announced, will address only a few of the 200-plus businesses the armed forces admit to owning. It has failed to put in place measures to prevent asset-stripping by the military. Moreover, critics warn the government's narrow approach ignores the TNI's many other economic entanglements.

The human rights consequences are serious. Cases investigated by human rights groups show that soldiers have employed abusive tactics -- including violence and intimidation, extortion and property seizures -- to advance their financial interests or those of their business partners.

One coal company in South Kalimantan sub-contracted part of its business to a military cooperative in order to combat illegal mining. But the soldiers ran the operation as a coal mafia that brokered deals for the company, oversaw illegal mining, and exploited workers. Military personnel extracted protection payments from miners and used threats and beatings to keep them in line.

In November the Bush Administration, without consulting Congress, invoked a national security waiver to override longstanding human rights restrictions on military aid to Indonesia. Last month the Administration asked Congress to approve $6.5 million in proposed Foreign Military Financing (FMF) for the Indonesian military, more than a six-fold increase over the previous year. The Administration maintains that this assistance will "provide further incentives for reform of the Indonesian military."

But giving more support to an unreformed military that retains its independent money-making ventures will not make Indonesians safer, and could make the U.S. complicit in future abuses. The Indonesian military continues to act with impunity: many officers remain on active duty even after being indicted for war crimes in East Timor by a UN-organized court that Indonesia has ignored.

Some U.S. military trainers have told Human Rights Watch that providing aid without reform is wrongheaded. In Jakarta earlier this month, however, U.S. Assistant Secretary of State Christopher Hill declared that the Bush Administration is "very satisfied" with progress toward military reform.

The new TNI chief, Air Marshal Djoko Suyanto, has pledged to advance some elements of military reform. But he has not yet established a track record and is expected to face internal resistance from powerful elements in the army. Also, rather than pledging to stamp out military economic activity, he has argued that the TNI should be allowed to retain some businesses.

Before the Bush Administration provides assistance to the Indonesian military, it should demand to see evidence of real reform. Secretary Rice should press Indonesia to place the military under the authority of the civilian defense ministry. She also should use her trip to announce that the U.S. will refuse to provide them with lethal weapons and will insist on robust monitoring of whatever aid it sends.

The U.S. can usefully support enhanced civilian oversight, proper military budgeting practices, the publication of audits of the military, and efforts to clamp down on military corruption. It also should press the government for concrete benchmarks and a timetable to implement the ban on military businesses. Ending military self-financing is a precondition for the professional army and stable democracy the U.S. says it wants to help Indonesia build.

Lisa Misol, a researcher with Human Rights Watch in New York, has investigated the human rights impact of military economic activity in Indonesia for a forthcoming Human Rights Watch report.

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